BRUSSELS, November 24. /TASS/. The ambassadors of the EU countries did not agree on the introduction of a price cap for Russian oil on Wednesday, negotiations will continue. Kadri Simson, European Commissioner for Energy, confirmed it to reporters after arriving to an informal meeting of EU Energy ministers on Thursday.
"Indeed, late last evening they decided that they will continue the discussions," she said in response to a request to confirm the failure of the first meeting of EU ambassadors to discuss a price cap for Russian oil.
According to sources, the ambassadors discussed the possibility of introducing a price cap for Russian oil in the range of $65-70 per barrel. The discussion revealed a deep divide between countries that want to punish Russia, such as Poland and the Baltic states, which consider this cap too high, and countries that receive a significant part of the income from sea transportation of oil - Greece, Cyprus, Malta and others, which find that the threshold level is too low and threatens to undermine the world oil trade.
For the EU, the introduction of a price cap on Russian oil has little to do with the energy crisis in Europe, since from December 5, an embargo on the purchase of Russian oil by sea comes into force in the community. Therefore, the main components of the discussion are not energy, but trade and political.
The G7, at the initiative of the United States, intends to try to impose a price cap on Russian oil, relying on the fact that most oil transportation and insurance companies are located in states that are members of or affiliated with the G7, such as Greece, Cyprus, Malta and other small EU members.
Meanwhile, the price of Russian oil is currently at around $70/bbl on a discounted basis, so the $65-70/bbl price cap won't matter much from an economic standpoint. But if the G7 manages to agree on it, introduce it and convince the largest oil importers to join it, this could have long-term strategic implications in the event of a new surge in oil prices. Moreover, the price cap will have a dynamic nature, and if the system is created, the G7 may subsequently try to lower it further, although without guarantees of success.
According to European experts, in this regard, there is a serious risk that Russia will cut off supplies to countries that join this mechanism, even if it is painless for Moscow at the moment. This, in turn, may cause a sharp rise in prices on the world market if other oil producers do not sharply increase production.